Mass Customization 500 study

Source: MC-500 website

Solution Space Development
First and foremost, a company seeking to adopt mass customization has to be able to understand what the idiosyncratic needs of its customers are. This is in stark contrast to the approach of a mass producer, where the company focuses on identifying “central tendencies” among its customers’ needs, and targets them with a limited number of standard products. Conversely, a mass customizer has to identify the product attributes along which customer needs diverge the most. Once this is understood, the firm knows what is needed to properly cover the needs of its customers. It can draw up the “boundaries of its playground”, clearly defining what it is going to offer and what it is not – the firm’s solution space is defined. Mass customization necessarily implies the development of vast solution spaces, thus escalating the cost and complexity of understanding customer needs, in terms of spotting differentiating attributes, validating product concepts, and collecting customer feedback.

Robust Process Design
A second critical requirement for mass customization is related to the relative performance of the value chain. Specifically, it is crucial that the increased variability in customers’ requirements does not lead to significant deterioration in the firm’s operations and supply chain. This can be achieved through robust process design, defined as the capability to reuse or re-combine existing organizational and value chain resources to fulfill  differentiated customers‘ needs. With robust process design customized solutions can be delivered with near-mass-production efficiency and reliability.

Choice navigation
Finally, the firm must be able to support customers in identifying their own problems and solutions, while minimizing complexity and burden of choice. When a customer is exposed to too many choices, the cognitive cost of evaluation can easily outweigh the increased utility of having more choices, creating the “paradox of choice”: too many choices reduce customer value, instead of increasing it.

As such, offering more product choices can easily prompt customers to postpone or suspend their buying decisions, and, even more worryingly, to classify the vendor as difficult to deal with and hence undesirable.   

Therefore, the third requirement needed to ensure successful adoption of mass customization is the organizational capability to simplify the navigation of the company’s product assortment. We call that choice navigation.

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